Vlad Yatsenko, left, and Nik Storonsky cofounded Revolut in 2015.
Revolut’s cofounder and CEO Nik Storonsky has reiterated his preference to go public in the U.S., declaring that it’s “just not rational” to list in London under the current conditions.
Speaking on the 20VC podcast, Storonsky said London’s stock market is less attractive as a listing venue because of liquidity and costs.
“The problem with the U.K.—if you think about the U.K. versus the U.S.—the U.S. is much more liquid and trading in the U.S. is free,” Storonsky said in an interview with 20VC’s founder Harry Stebbings.
“If you look at trading in the U.K., you always pay a stamp duty tax, which is 0.5%. So I just don’t understand how the product which is being provided by the U.K. can compete with the product provided by the U.S. It’s less liquid, so it’s much worse compared to the U.S., plus it’s much more expensive because you pay stamp duty, so it’s just not rational.”
Storonsky pointed out that Revolut was already operating like a public company because banks are required to have even stronger controls than listed companies. But he also indicated there was no need for his fintech to rush into an IPO.
He said Revolut would likely go public “sooner or later” to give its venture capital investors the opportunity to sell their shares into a more liquid market.
Revolut was recently valued at $45 billion in a secondary share sale that allowed employees and early investors to cash in their stakes. But the company’s rapid growth and ambitious expansion plans has been fueling speculation over what’s expected to be a blockbuster IPO.
If Britain’s most valuable fintech opts for the U.S., it would be a heavy blow to the London market, which has seen a slew of companies switch their listings to other markets in recent years. The government is trying to overhaul the financial sector to make London’s stock market more attractive, but the reforms adopted so far have been met with a mixed reception.
The stamp duty on share trading is a long-running point of contention in the U.K. Instead of paying a 0.5% tax to trade U.K.-listed stocks, investors can shift their funds to markets with low or no costs, such as the U.S.
On Monday, the new Lord Mayor of the City of London, Alastair King, added his voice to the issue by making his own call for action.
King said: “We should look again at stamp duty imposed on trading in U.K. shares. It cannot be logically correct that, as it stands, we do not pay tax on purchases of international vehicles such as Tesla, but we are taxed for investing in a British brand like Aston Martin.”
“Recalibrating that misalignment would provide a shot in the arm for homegrown companies looking to scale-up,” King continued, “companies that are currently all too often heavily reliant on U.S. funds, resulting in even more of them listing outside the United Kingdom.”